Stock Splits and UK Capital Gains Tax — How to Adjust Your Section 104 Pool

When a company does a stock split, your number of shares goes up but the total value stays the same. HMRC is clear: a stock split is not a disposal and does not trigger Capital Gains Tax. But it does change the numbers in your Section 104 pool, and getting this wrong is a guaranteed route to an incorrect tax return.

What happens in a split

In a 10-for-1 split (like NVIDIA did in June 2024), every share you own becomes 10 shares. The price per share drops by the same factor — roughly a tenth of its pre-split price.

The key principle under TCGA 1992 sections 126-131: the total cost of your holding doesn’t change. Only the number of shares and the cost per share change.

Your Section 104 pool goes from 50 shares at $800 to 500 shares at $80. The total pool cost remains exactly $40,000.

Recent major splits UK investors encountered

How to adjust your pool

The adjustment depends on when you bought relative to the split date:

Bought before the split, still holding: Multiply your quantity by the split ratio. Divide your cost per share by the split ratio. Total cost unchanged.

Bought before the split, sold after: The same adjustment applies. Your pre-split purchase of 10 shares at $1,200 becomes 100 shares at $120 in the pool. When you sell post-split at $135, the gain per share is $135 − $120 = $15.

Bought after the split: No adjustment needed. The post-split price is already reflected in your purchase.

Bought before the split, sold before the split: No adjustment needed — both transactions are in pre-split terms.

Worked example: NVDA 10:1 split

Sarah bought 20 NVDA shares at $450 each in March 2024 (total cost $9,000). NVDA did a 10:1 split on 10 June 2024. She sells 100 shares at $130 each in February 2025.

Pool adjustment at split:

Before: 20 shares, cost $9,000, avg $450/share

After: 200 shares, cost $9,000, avg $45/share

Sale calculation:

Selling 100 of 200 pool shares.

Cost: 100 × $45 = $4,500

Proceeds: 100 × $130 = $13,000

Gain: $8,500 (before GBP conversion and fees)

If she hadn’t adjusted for the split, she might think her cost was 20 × $450 = $9,000 for 20 shares, and selling “100 shares” at $130 wouldn’t make sense against a pool of only 20. The numbers simply don’t work without the adjustment.

Reverse splits and consolidations

These work the same way but in reverse. If a company does a 1:10 reverse split, your 1,000 shares become 100 shares, and the cost per share is multiplied by 10. Total cost unchanged.

Reverse splits are less common among popular retail stocks, but they do happen — particularly with smaller companies trying to maintain a listing price above exchange minimums.

Your broker might confuse things

Most brokers adjust your portfolio automatically after a split — you’ll see the new share count and new price in your account. But they don’t always adjust historical transaction records in their CSV exports.

This means your broker’s CSV might show a purchase of “20 shares at $450” (pre-split) alongside a sale of “100 shares at $130” (post-split). If your CGT calculator doesn’t know about the split, it can’t match 100 sold shares against a pool of only 20.

TaxBull has built-in split data for NVDA, TSLA, AMZN, GOOGL, SHOP, and GME. Pre-split purchases are automatically adjusted before matching. You can also add your own custom splits for any ticker — enter the company, date, and ratio in the settings, and all prior transactions are adjusted accordingly.

Don’t report splits as disposals

A final warning: some people see the “split” event in their broker’s transaction log and think they need to report it. You don’t. A stock split is not a chargeable event. No SA108 entry. No gain or loss. It’s purely an internal adjustment to your pool numbers.

The same applies to bonus issues (scrip issues), which are economically similar to splits. New shares from a bonus issue enter the pool at nil cost — the total pool cost stays the same, the number of shares increases, and the average cost per share drops.

This article is for informational purposes only. If you’ve held shares through reorganisations, takeovers, or demergers (which are more complex than simple splits), consult a tax professional.